C.H. Robinson boosted by acquisitions in 2012

Wednesday, February 06, 2013

C.H. Robinson experienced a 15.7-percent year-over-year increase in revenue during the fourth quarter of 2012, ending the period at $2.97 billion.
The strong showing during the last three months of the year propelled 2012 total revenue to $11.3 billion, a 9.9-percent rise from 2011’s total.
Revenues across most of the modes rose in the fourth quarter and finished the year in positive territory, with ocean and air transportation revenues increasing 98 percent and 81 percent, year over year, respectively, on the way to large annual increases. Intermodal revenue, however, declined for the year when compared to 2011, falling 5.8 percent to $38,815.
The massive increase in air revenue was impacted by C.H. Robinson’s November acquisition of global forwarder Phoenix International. Excluding the other company’s influence, air revenues still increased by 19 percent in the fourth quarter due to increased pricing and the dwindling cost of capacity, officials said. These increases were offset by a decline in volumes.
The Phoenix acquisition had an even greater impact on ocean revenues. Discounting Phoenix’s contribution, ocean only rose by 3 percent in the fourth quarter. Increased pricing mixed with decrease volumes also impacted ocean freight.
Ninety days into C.H. Robinson’s acquisition of Phoenix, the two companies are well on their way to integration. The investment in forwarding growth will allow C.H. Robinson to be very competitive in the arena, John Wiehoff, the company’s chief executive officer, said during an earnings call. He added that officials “feel very good” about the integration so far. The companies are already consolidating and co-loading freight in some locations and there have been a few office combinaitons, with more to come.
“We believe we’re off to a good start with the integration of that acquisition, and going forward, it really will be a combined air and ocean activity with hopefully meaningful increases in the net revenue for both of them throughout 2013,” he said during the call.
In the future, C.H. Robinson will turn more of its attention to European growth, spurred on by its October acquisition of Poland-based freight forwarder Apreo Logistics. The company has already moved key members of its team to Europe to help drive growth in the freight forwarding arena.
“Despite an overall difficult environment in Europe, we do have very high expectations for the long term about what our presence can be there and replicating a lot of our services,” he said.
A number of challenges remain worldwide, making the growth picture in 2013 a little cloudy. The company’s biggest foe is transportation margin compression. In the fourth quarter of 2012, less-than-truckload volume was up 16 percent, but the company experienced a new revenue margin decline. - Jon Ross